Online spending dips as shoppers look to do more with less

Person buying online using mobile phone. | Newsreel
More Australians are buying online, but they are spending less. | iStock

More Australians are buying online, but overall spend has dropped with younger generations tightening their belts.

Australia Post’s 2024 Inside Australian Online Shopping Report shows more than 80% of households (9.5 million) shopped online last year, up 1.4% year-on-year, but overall spend was down 1.2% to $63.6 billion.

There is a marked difference in behaviour across the generations with cost-of-living pressures taking their toll.

Gen Y (millennials) spent more than any other generation ($22.1 billion) despite their average basket size declining by 2% YoY ($95).

Gen X followed suit, spending $17.47 billion online while their average basket size declined by 5% YoY to $110 and Gen Z spent the least ($10.64 billion), choosing more budget-friendly purchases with $80 as the average basket size.

Bucking this trend, Baby Boomers spent 7% more than the prior year ($109 average basket size).

Social researcher and generational expert Claire Madden said: “We’re seeing a growing confidence in older generations spending more than younger generations in each transaction. While Gen Z don’t currently have the same earning capacity as older generations, they are showing they are still active, savvy, online shoppers who have a focus on lifestyle spend and search for good value.”

Australians spent the most on home and garden ($16 billion), a category which traditionally has more expensive items like furniture.

The two categories that showed growth were variety stores ($15.8 billion, with YoY growth of 9.1%) and food and liquor ($13.2 billion, with YoY growth of 2.4%).

Across the country, West Australians embraced the online shopping trend with the strongest YoY growth in number of online purchases of the states/territories (5.1%), followed closely by the Northern Territory (4.6%) and Queensland and Tasmania (4.3% each).

The report says significant 18% increase in online shopping activity since 2019 in remote and regional Australia can be attributed to population growth post COVID-19 and convenience, while Victoria and New South Wales saw a drop in online purchases, with both states returning to normal shopping habits since the pandemic.

To view the full report visit the Australia Post website.